Grid Batteries Are Poised to Become Cheaper Than Natural-Gas Plants in Minnesota

A new report suggests the economics of large-scale batteries are reaching an important inflection point.

A 60-acre solar farm in Camp Ripley, a National Guard base in Minnesota.

When it comes to renewable energy, Minnesota isn’t typically a headline-grabber: in 2016 it got about 18 percent of its energy from wind, good enough to rank in the top 10 states. But it’s just 28th in terms of installed solar capacity, and its relatively small size means projects within its borders rarely garner the attention that giants like California and Texas routinely get.

A new report on the future of energy in the state should turn some heads (PDF). According to the University of Minnesota’s Energy Transition Lab, starting in 2019 and for the foreseeable future, the overall cost of building grid-scale storage there will be less than that of building natural-gas plants to meet future energy demand.

Minnesota currently gets about 21 percent of its energy from renewables. That’s not bad, but current plans also call for bringing an additional 1,800 megawatts of gas-fired “peaker” plants online by 2028 to meet growing demand. As the moniker suggests, these plants are meant to spin up quickly to meet daily peaks in energy demand—something renewables tend to be bad at because the wind doesn’t always blow and the sun doesn’t always shine.

Storing energy from renewables could solve that problem, but it’s traditionally been thought of as too expensive compared with other forms of energy.

The new report suggests otherwise. According to the analysis, bringing lithium-ion batteries online for grid storage would be a good way to stockpile energy for when it’s needed, and it would prove less costly than building and operating new natural-gas plants.

The finding comes at an interesting time. For one thing, the price of lithium-ion batteries continues to plummet, something that certainly has the auto industry’s attention. And grid-scale batteries, while still relatively rare, are popping up more and more these days. The Minnesota report, then, suggests that such projects may become increasingly common—and could be a powerful way to lower emissions without sending our power bills skyrocketing in the process.